Cybersecurity and Performance Risks in the Growing Solar Industry: Insights from kWh Analytics

‘Once You Hit a Critical Mass, You Become a Target’ – Insights from kWh Analytics on Cybersecurity, AI, and Underperformance
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As solar energy continues to gain traction globally, it has become increasingly important to address the associated risks. In 2024, solar capacity accounted for over 60% of new additions in the U.S., but this growth has also highlighted issues related to technological shortcomings and suboptimal asset performance. A recent report by kWh Analytics, a U.S.-based climate insurance firm, discusses how optimization, especially through digital solutions, can create new challenges if not implemented correctly.

According to kWh Analytics’ Solar Risk Assessment 2025, cyberattacks targeting U.S. utilities surged by 70% in 2024. This increase is attributed to the rapid deployment of highly connected assets and advanced monitoring systems designed to enhance efficiency and performance. Most of these assets are solar PV and energy storage systems, monitored and controlled by digital inverters and a network of servers. The report reveals that U.S. solar assets are underperforming by an average of 8.6%, and poorly modeled artificial intelligence (AI) systems misidentify 20% of operational defects in PV projects, leading to significant consequences.

In an interview with Gregory Lehv, senior vice president of kWh Analytics, key issues surrounding solar module defects, plant underperformance, AI utilization, and cybersecurity risks in the U.S. solar sector were discussed.

### Cybersecurity Risks

Lehv noted, “Since 9/11, we have been aware that the energy grid is a potential target for malicious actors. However, at that time, solar energy represented only about 0.1% of energy production in the U.S.” In the past 24 years, the reality of cyberattacks has changed dramatically. “Once you reach a certain critical mass, you become a target. I believe we are approaching that threshold.”

The report by technical advisory firm Radian Generation corroborates that U.S. renewable energy sources are indeed targets for cyber threats. The extensive digital infrastructure used to optimize and monitor solar and energy storage systems has increased the number of access points for potential attackers. According to Radian, even well-protected solar sites encounter and block hundreds of cybersecurity threats daily. Smaller companies, in particular, may face heightened exposure. “When developing assets independently, smaller firms bear the burden of managing distributed, non-uniform resources,” Lehv explained. In contrast, larger companies with consolidated ownership can adopt a more uniform—and often more secure—approach. “There is a significant risk that this issue will escalate for the industry compared to previous years.”

Some of the threats are believed to be state-sponsored. The report highlights the SolarWinds breach of 2020, where hackers thought to be backed by the Russian government targeted major U.S. firms. More recently, reports have surfaced about unauthorized communication devices found in Chinese-made inverters in the U.S., drawing attention within the industry. “The industry must recognize this issue and implement robust cybersecurity measures on critical infrastructure,” Lehv emphasized. “While the distributed nature of solar is advantageous, compromised monitoring or management software can severely disrupt energy production.”

The Radian report similarly stresses the importance of prioritizing cybersecurity alongside physical asset management as clean energy deployments accelerate. Although the precise origins of cyberattacks remain uncertain, the intent is clear: they target the interconnected energy systems in the U.S., where malicious software can have the widest impact. So far, however, no significant production losses attributable to cyber events have been reported. “As of now, no one has experienced massive production losses due to a cyber incident,” Lehv remarked. “We are still at a stage where it is a significant risk—but one that is yet to materialize.”

### AI Challenges

The Solar Risk Assessment also indicates that AI models in use at solar facilities misclassify up to 20% of operational issues. Lehv attributes this to inadequate training. Researchers at kWh Analytics tested an untrained large language model against a fine-tuned model that used over 8,000 data points from operational and maintenance logs. The untrained model consistently misclassified between 15% and 25% of common power loss events, including grid curtailment and communication failures. For critical issues like extreme weather and damage losses, the untrained model was incorrect 40% to 50% of the time. Fine-tuning the AI model significantly enhanced its accuracy.

In the rush to adopt AI, Lehv pointed out, “AI comprises two letters that can mean 900 different things,” highlighting the urgency to deploy this technology effectively. “We are in an AI arms race, primarily between the U.S. and China, and everyone is striving to keep pace. The risk of falling behind is significant.”

While AI can improve plant management efficiency and accuracy, it also introduces additional cybersecurity vulnerabilities. “Some coding tasks are already being handled by AI, creating dual-use potentials,” Lehv noted. “It can enhance cybersecurity systems but could also generate malicious software.”

Effective communication among asset owners is crucial in mitigating AI failures and cybersecurity risks. “This communication does not always happen organically because these companies are competitors,” Lehv explained. “However, for an issue that affects the entire industry, I believe there will be an increased willingness to share information.”

### Underperformance and Overestimation

The Solar Risk Assessment attributes some of the underperformance of U.S. PV assets to well-documented issues, including module quality concerns, inverter underperformance, and a lack of reliable data for project analysis. While these problems should improve over time, Lehv indicates that the trend of underperformance remains steady or is even worsening due to financial incentives and modeling practices.

An analysis of data from over 34,000 “system-months” between 2015 and 2023 found that U.S. systems are operating at 8.6% below industry-wide P50 estimates. P50s serve as benchmarks for financial agreements, assuming that plants will achieve their nameplate production capacity half the time. Lehv explained, “The reason the trend is stagnant or deteriorating is partly due to the incentives tied to projects.” Developers often face pressure to present optimistic output estimates to secure financing, which can lead to assumptions that may not hold true over time.

The report concludes that aligning financial models with actual performance could help mitigate long-term financial risks, bolster investor confidence, and support sustainable growth in the solar industry.

### Future Outlook

The impressive growth of the solar industry in recent years is under threat in the U.S. due to potential cuts to federal incentives for renewable energy and the impact of tariffs instituted during the previous administration, which may increase costs for solar PV and energy storage development. Nevertheless, Lehv remains cautiously optimistic. “I focus on economics. The current demand landscape is vastly different from what it was five years ago. Our energy consumption has increased significantly.”

He added, “Regardless of policy changes, if supply decreases, prices will inevitably rise. Tariffs will elevate the cost of PV products, and the reduction of subsidies will further increase technology costs.” With solar accounting for over 60% of capacity additions last year, reversing this trend will not be easy. “Transitioning back to natural gas is possible, but those currently investing in solar are not likely to shift gears quickly. Such a turnaround would take seven to ten years, which exceeds the timeframe of any single administration.”

As demand rises and supply diminishes, prices will likely increase across the board. For Lehv, even if prices rise, solar will still be the fastest and most cost-effective energy technology to deploy, albeit slightly more expensive and slower than before.